After what can only be described as years of chaos in the water industry and unacceptable levels of disruption for business water customers caused by the actions of the bigger water companies, change feels like it is on the horizon.
However, whilst the country has been focused on a General Election that has the potential to produce its own major changes to the water sector, lost within the margins two days before Election Day was a UK Supreme Court judgement that has the potential to change everything.
Change is a word that has been used a lot, particularly the need for change in the water industry, but that change will come from a wide range of areas, including the legal system as it currently exists. One case, in particular, may be at the vanguard of this.
Manchester Ship Canal vs United Utilities
One avenue for forcing improvements is through legal precedent, and this has proved a problem for two years thanks to the case of The Manchester Ship Canal Company Limited (MSCC) v United Utilities Water Limited (UU).
The facts of the case are familiar to many people throughout the country; United Utilities is one of many water companies that have been credibly accused of discharging untreated sewage into water courses, rivers, streams and canals.
In this case, the watercourse in question was Manchester’s historic canal network, legally owned by MSCC, who tried to sue UU for trespass and nuisance, used under the definition of an “unjustifiable interference” with its possession.
The facts of the case were not in any doubt, but the question was whether private legal claims could be made against UU, given that the Water Industry Act 1991 has a statutory scheme for such issues that has itself garnered a lot of attention in recent years for its perceived inability to stop unauthorised sewage dumping.
The case was brought in 2021 but was based on a nest of legal claims that had been claimed for over a decade at that point, with the question of whether the dumping of untreated sewage on its own constitutes an actionable crime beyond the legislative framework for the private water sector.
Ultimately, the High Court in 2021 and later the Court of Appeal in 2022 judged that MSCC could not sue UU for sewage pollution on its own, but only if there was proof of negligence, misconduct or malice, which is far harder for a private company to prove.
The case went to the UK Supreme Court, by which point the entire water sector had been plunged into chaos and controversy, with a range of investigations being placed into the industry and radical proposals being made to stop companies too-big-to-fail from collapsing entirely.
The basis of UU’s argument was that the 1991 Act superseded any other attempts to sue outside of negligence or misconduct, and so MSCC could not really make a legal claim.
However, the UK Supreme Court overturned the appeal, making the claim that the 1991 act was not incompatible with the letter of common law concerning nuisance or trespass, arguing that a right of action could therefore be brought.
To say that this is a huge precedent is an understatement the length and breadth of England’s waterways. It opens up the potential for private citizens to sue water companies on the fact that untreated sewage is in their waterways beyond the legislative framework but without the additional burden of proving intent.
It pushes open the door to legal challenges and is one of several catalysts for massive changes to improve the quality of water and reduce the unacceptable number of untreated run-offs, the results of which have meant that several areas of outstanding national beauty have been tainted by raw sewage.
Water activist Fergal Sharkey described the judgement as “massive” and could lead to thousands of additional claims against water companies, alongside the larger investigations by organisations such as the Environmental Agency.
What it will mean for water bills and the fates of water companies already notably struggling to deal with the statutory fines they are facing amidst massive levels of debt is as yet unclear, as it will depend not only on this case and the decision from Ofwat regarding price increases but also the results of the General Election.
After a historic landslide that has shifted the UK political landscape after 14 years, the new government will be forced to act quickly to avoid the unthinkable situation of a water company collapsing, and the potential domino effect that could cause.
